As Silicon Valley entrepreneurs continue to launch their startups with VC funding to the tune of $15 billion in 2018, some founders are beginning to question the go big or go home model in which 90% fail or cannot justify the investments. What if disruptive companies held on to their autonomous owner’s mindset, opting for a make-money approach instead of a raise-money approach? In this session, learn how and why Arkadium’s founders decided to buy back the company from its investors in 2018. As the VC industry is poised for another record year, Co-Founder & CEO Jessica Rovello shares her philosophy that tech companies should keep their eyes on the long-term prize, leaning towards a more purpose-driven, evergreen enterprise that values its people and its independence.

1. BOOTSTRAP OR RAISE: LESSONS
FROM A FOUNDER WHO DID BOTH
JESSICA ROVELLO
CEO & Co-Founder
Arkadium
@jessrovello

2. Jessica Rovello
CEO & Co-Founder
Arkadium
@jessrovello
Bootstrap or Raise: Lessons from a Founder who did
Both with Arkadium

3. VC Day
Today is VC day.
There are over 200 VCs here trying to pitch you
to take their money.
I’m here to propose an alternative.

4. Warning – the alternative is not for everyone
• If you have a short time frame (3-5 years)…
• If you don’t have a track record of attracting top tier
talent…
• If you are in a capital-intensive business…
• If outside validation is important to you…
• Or if you believe that you’re only as good as the name of
the VC that has backed you…
…then this is probably not the path for you

5. My Story
2001
Founded Arkadium
as an online gaming studio

6. My Story
Don’t
Raise
Money
(Yet)

7. My Story
2001
Founded Arkadium
as an online gaming studio
2011
Partnered
with Microsoft
to create the
Solitaire Collection

8. My Story
2013
Accepted $5M
Series A
funding
from
Edison Partners

9. Life Happens

10. In our case, a war

11. My Story
2013
Accepted
Series A
funding
from
Edison Partners
2018
Bought out investors
to regain full ownership

12. Lessons from both sides

13. The good/bad/ugly of taking money

14. The Good
• If you want or need money now is the time - In
2018, startups raised $99.5 billion in over
5,500 deals*
• You can hire more people and purchase
necessities immediately
• Boards are healthy (if you have a healthy
board)
• “Cred”
*Source: PWC

15. The Good
• Pressure to move more quickly than you may
put on yourself
• Greater level of accountability
• Additional support/introductions
*Source: PWC

16. The Bad
• You will be away from your business – a lot
• It can be difficult to pivot from the current
strategy if something goes wrong
• You will likely move more slowly than you
should be moving
• You will need to find a way to grow your KPIs by
50% YOY

17. The Ugly
• Up to 90% of VC-financed startups either fail or
don’t return enough to justify the investment
• 50% of founders are replaced within 3 years of
accepting VC-funding
• If you miss your projections, you will be out, if you surpass your
projections, you will be out
• Growth-at-all costs mindsets and their
consequences are damaging the underpinnings
of our society

18. The good/bad/ugly of going at it alone

19. The Ugly
• You will be characterized as a “lifestyle business”
even if you make tens of millions in revenue, 25%
profit margins and have over 50 million customers
• Shallow people will ask who backed you - when you
reply “no one” they will be smug and walk away or
pretend that they think it’s cool
• At some point, you’re likely to miss payroll

20. The Bad
• You may not be invited to “important” parties
• Banks won’t talk to you as quickly and easily as they
will if you are backed, and your terms may not be as
good
• The press will likely focus on the bright shiny object
(the company that just raised a huge round)
• Competitors will think you’re weak and attempt to
mess with you (actually an advantage)

21. The Good
• You will attract people to your business that
are there for the right reasons
• You will be free to make decisions that are
right for the business vs. right for its
investors
• You will be forced to be lean, get customers
and be profitable – FAST

22. The Good
• You will have more time to lead, coach and
inspire your staff
• You will be able to make decisions based on
long term vision
• You will be able to exit when and how you
see fit

23. Other Considerations
• If your primary motivation in taking on
funding is to get rich – join a hedge fund
• Employees are starting to care more and
more about who backs you, and what you
stand for

24. Separating from VCs
| SEPTEMBER 19, 2018

25. Separating from VCs
AUGUST 29, 2019

26. Separating from VCs
| OCTOBER 24, 2019

27. Separating from VCs
| JANUARY 11, 2019

28. $9.7B in annual revenue
19,000 employees
Founded in 1981
Accepted VC in 1983
Bought back all shares in 2008
$456M in annual revenue
559 employees
Founded in 2000
$75M in annual revenue
600 employees
Founded in 1995
Accepted VC in 2004
Bought back all shares in 2015

29. THANK YOU